Josh Brown got burned by Twitter. Now, another Jack Dorsey-led name made its way onto his Best Stocks list

Block (Square) is showing improving fundamentals: Q1 Cash App gross profit rose 38% YoY to $1.91B, Cash App monthly active users hit 59M, and Cash App Borrow originations grew 175%, alongside a 13% rise in hardware gross payment volume to $61.2B. Management lifted full-year 2026 guidance to $12.33B gross profit (+19%), $3.34B adjusted operating income (27% margin), and adjusted EPS of $3.85 (+62%). Despite this turnaround progress and an AI push that reportedly boosted productivity 2.5x, the article notes the market is still discounting the stock (about 15x forward earnings) and highlights technical levels around $81 and support near $74.

Analysis

The market is starting to price Block like a real operating story rather than a one-product momentum name, and that matters because the upside here is mostly multiple re-rating, not revenue surprise. The key second-order effect is that cost discipline plus automation can lift margins faster than headline growth suggests; if that sticks for two quarters, XYZ can move from “cheap for a reason” to “cheap with operating leverage,” which is where fintech multiples re-expand quickly.

Competitive dynamics are more interesting on the consumer payments side than the merchant side. Cash App’s momentum versus Venmo is the real battleground: if PayPal remains strategically distracted, XYZ gets a cleaner path to share gains, but if PYPL is forced into a transaction or reorganization, the competitive field may actually improve for XYZ by removing a slow-moving rival. The market is probably underestimating how much strategic overhang at PYPL can support relative outperformance in XYZ even without a full takeover outcome.

The contrarian risk is that this is still a repair story, not a finished one. Growth rates driven by lapping weak comparisons and headcount cuts can fade fast, so the thesis is falsified if gross profit decelerates or if the company needs to reaccelerate spend to defend share. Near term, the stock still needs to prove it can clear resistance; structurally, a close back below the 200-day would tell you the turnaround narrative is premature.

Key Decisions for Investors

• Buy XYZ only on a confirmed daily close above $81; use a 3-5% risk budget with a stop on a closing break below $74, targeting a move toward $90-95 over the next 1-3 months.
• Use a 3-6 month XYZ call spread to express the turnaround with defined downside if you expect guidance and margin leverage to persist; prefer strikes centered around the $80-$95 area.
• Pair trade: long XYZ / short PYPL in modest size only if PayPal deal chatter fades and no higher bid appears; this is a relative-execution trade, not a merger arb bet, and should be covered immediately if PYPL gets a credible takeout catalyst.
• Treat a close below $68 in XYZ as a thesis failure signal for the multi-year base and exit any swing long exposure.